PUTRAJAYA — July 7, 2018: The Inland Revenue Board (IRB) is now re-examining the RM2.6 billion said to have been received by former prime minister Datuk Seri Najib Razak is now subject to further examination.
The re-examination is being done following the disclosure by the Malaysian Anti-Corruption Commission (MACC) chief commissioner Datuk Seri Shukri Abdull and ongoing investigations on issues related to 1Malaysia Development Bhd (1MDB).
The original tax treatment for the money was decided on February 16, 2016, and based on the findings by agencies given the task to investigate, the amount was found to be a donation and voluntary in nature and thus had no income characteristics.
Pursuant to the general principles of taxation with respect to such voluntary payment, IRB Chief Executive Datuk Seri Sabin Samitah explained that the money was not an income subjected to tax.
“A voluntary payment may change in character and be subject to tax if it is given repetitiously, as consideration for services rendered, in return for any benefit of any kind or the amount is used in a business activity in order to sustain business operations,” he said in a statement today.
In ascertaining the true nature of the payment, the IRB will work closely with all agencies and the newly formed committees investigating 1MDB.
With regard to the seizure of cash and valuables from an apartment in Kuala Lumpur, Sabin said a notice will be issued to individuals connected to the items.
This is to ascertain whether sufficient disclosure of income had been made to the IRB that commensurates with the assets owned by a particular individual.
In the event of an unexplained wealth, additional tax will be raised together with a penalty of a maximum of double the amount of tax under-declared. Failure by a person to comply with the notice within the specified time is an offence and can be prosecuted. — Bernama